The New Health Dialogue

So just how fast does that revolving door spin? The Kaiser Family Foundation this week released several reports on Medicare spending for people in nursing homes or other long-term care facilities.  Of course it's no surprise that these patients are expensive -- they wouldn’t be in nursing homes if they were in perfect health. But the reports shed a lot of light on just how expensive their care is -- and just how often they go in and out of emergency departments, the hospital, and skilled nursing facilities.

These patients cost Medicare $14,538 -- nearly twice the annual cost of the average Medicare beneficiary. (Remember that Medicare pays for doctors and hospitals and the like -- whether the person lives at home or in a long-term care (LTC) setting. Medicare does not pay for long-term care. Medicaid pays for the long-term care of low-income people.)

More than one in three Medicare beneficiaries in a LTC setting were hospitalized at least once in the year. Of these, 41 percent had two or more hospital admissions (or 15 percent of long term care residents overall).

Half had at least one emergency room visit -- and of that group half (26 percent overall) had two or more ER visits.

Medicare spending for the first six months of a patient’s LTC stay was more than $2000 a month -- more than double the average for people who had lived in a facility at least a year. This may reflect that our system does a really poor job of transitioning patients from one setting to another.

The Kaiser report estimated that a 15 percent reduction in hospitalization rates among long‐term care facility residents would save Medicare $1.3 billion (in 2010 dollars). A 25 percent reduction would reduce Medicare spending of $2.1 billion.

And those estimates, noted Tricia Neuman, a vice president of the Kaiser Family Foundation and director of its Medicare Policy Project, are quite conservative. Studies have estimated that hospitalizations could be reduced by as much as 30‐67 percent for long‐term care facility residents. And that savings estimate is only from hospital stays -- it doesn’t include ER visits, ambulances, skilled nursing facility stays and other related expenses.

Panelists at a Kaiser event discussing the findings cited several factors that contribute to these high hospitalization rates -- liability concerns, nursing and other staffing shortage, physician preferences, financial incentives -- and disincentives -- that permeate the system.

Physician preferences doesn’t mean the physician is “bad” or greedy or uncaring. Sometimes, as Cheryl Phillips, M.D. the Chief Medical Officer of On Lok Lifeways, said sometimes there are just many, many simultaneous demands on the doctor.  For instance, a physician might be following patients who have moved from their homes into long-term care settings. But if the nursing home calls the doctor and says the patient “doesn’t look so good” and the doctor already has 10 patients sitting in the waiting room, (some of whom also may not look, or feel, so good) it's hard for the physician to take off, go over to the nursing home, check on the patient, and come back to a waiting room that may well have 20 patients waiting by then. It may just be easier to tell the nursing home, “Send her to the hospital. Let's see what the ER has to say.” Sometimes nursing homes just have trouble getting x-rays or other tests done quickly -- or the results reported back quickly without sending the patient to the hospital. Some of these issues will be addressed to at least some extent in health reform. Some provisions in the new law will encourage hospitals to reduce readmissions. Others will introduce "bundled" payments, for instance covering 30 days of care, in and out of the hospital, which will require better coordination and communication. Electronic medical records, that all of a patient's physicians can access in and out of the hospital, will also help continuity of care.

Of course, there are doctors who send patients in the hospital because it’s convenient -- and financially beneficial. One of the reports issued by Kaiser included a series of very blunt interviews with providers and families, and it included comments like this one from a physician in Philadelphia.

They go to the hospital. I am going to be at the hospital anyhow. I am going to be there from 8:00 am to 2:30 p.m. For me to see two more or three more patients at the hospital versus running around at the nursing home… it is going to be logistically easier, more effective, better coordinated and financially profitable. I would have to be a moron to leave the patients that are moderately ill that I have to see daily at the nursing home, right?

The interviews also found that both families and nursing home staff felt there were mixed signals, communication gaps, and an inability to plan for the next crisis. And with this population, there is always a next crisis.